More specifically, reliable records of interest rates start about 3,000 years ago. We have *never* in all of this recorded human history seen interest rates as low -- indeed negative! -- as they are today.https://twitter.com/maxkeiser/status/1161000868784877570 …
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There have undoubtedly been brief periods when inflation temporarily so outstripped positive nominal interest rates that it produced more deeply negative real interest rates. It's often hard to measure inflation, though, and thus the level of "real" rates.
The OT refers to negative nominal rates, which are a special hell of their own due, in order for them to even purport to work as advertised, to suppress or, as this goes on longer or deeper, try to ban cash, gold, cryptocurrency, & other such liquid spot markets.
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Makes sense. Lenders might also hope the rate of inflation would drop to make a loan profitable or they might have made the loan when inflation was lower. So even if we had the same real negative interest rates the effects wouldn’t necessarily be equal on the economy.
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Neg. nominal rates can ‘make sense’ in a context of deflation, which can make the real rate positive again. In that sense, negative nominal rates could be viewed as yet another sign the market desperately wants to deflate, but is thwarted by CBs who view that signal as ‘invalid’.
End of conversation
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